Correlation Between Jutal Offshore and Keurig Dr

Can any of the company-specific risk be diversified away by investing in both Jutal Offshore and Keurig Dr at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jutal Offshore and Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jutal Offshore Oil and Keurig Dr Pepper, you can compare the effects of market volatilities on Jutal Offshore and Keurig Dr and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jutal Offshore with a short position of Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jutal Offshore and Keurig Dr.

Diversification Opportunities for Jutal Offshore and Keurig Dr

0.6

Correlation Coefficient

Jutal Offshore  Keurig Dr

Poor diversification

The 3 months correlation between Jutal and Keurig is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jutal Offshore Oil and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper and Jutal Offshore is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jutal Offshore Oil are associated (or correlated) with Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Jutal Offshore i.e., Jutal Offshore and Keurig Dr go up and down completely randomly.

Pair Corralation between Jutal Offshore and Keurig Dr

Assuming the 90 days horizon Jutal Offshore Oil is expected to generate 2.94 times more return on investment than Keurig Dr. However, Jutal Offshore is 2.94 times more volatile than Keurig Dr Pepper. It trades about 0.36 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.13 per unit of risk. If you would invest  2,382  in Jutal Offshore Oil on March 21, 2024 and sell it today you would earn a total of  518.00  from holding Jutal Offshore Oil or generate 21.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Jutal Offshore Oil  vs.  Keurig Dr Pepper

Jutal Offshore Oil

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Jutal Offshore showed solid returns over the last few months and may actually be approaching a breakup point.

Keurig Dr Pepper

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Keurig Dr Pepper are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile fundamental indicators, Keurig Dr reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jutal Offshore and Keurig Dr

The main advantage of trading using opposite Jutal Offshore and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jutal Offshore position performs unexpectedly, Keurig Dr can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Keurig Dr will offset losses from the drop in Keurig Dr's long position.

The idea behind Jutal Offshore Oil and Keurig Dr Pepper pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.